Patent Matters – Don’t Hate the Player, Hate the Game

April 17, 2012

The recent acquisition of the Netscape/AOL patent portfolio reminded me that an update on Mozilla’s patent strategy is long overdue. This post is about what we’ve done and what we could/should do in the future.

As you may have seen, there’s been a lot of patent litigation activity lately. The Yahoo suit against Facebook is one of the most surprising – at least to me. And the US Supreme Court just recently weighed in to re-affirm a long held axiom of patent jurisprudence that laws of nature are not patentable subject matter, so the judiciary is getting more active as well.

What’s driving the increase of patent activity? There are numerous drivers in my view including increased competition in the mobile space, the desire for competitive advantage particularly if a company is struggling in the market, and demands for incremental license revenues. Invariably, patent portfolios become more attractive tools for revenue and market competition when a business is not doing well or threatened.

The traditional strategy has been for each company to develop the largest possible patent portfolio to act as a deterrent against potential plaintiffs. This is known as a defensive approach. Others make no such claim at all, and still others do a bit of both depending on the circumstances. For early stage companies and start-ups, patent rights may also be important. If the business fails in the market, IP rights may turn out to be the most valuable asset for investors.

I personally struggle with the effectiveness of “build a big patent pool” as a one size fits all approach. It may not work if you’re way behind in the game or even conflicted about software patents. Also, if done organically, it simply takes too long. In other settings it may however make perfect sense, especially with enough resources and sufficient inventive material that is relevant to your competitors. I got to do this for a few years in my first in-house counsel job working for Mitchell Baker long ago where I was tasked with creating the initial Netscape patent portfolio.

So far Mozilla has not adopted the traditional strategy. A while back we made an exception to file four patent applications on some novel digital audio and video compression codecs co-invented with a contributor at the time. We assigned those applications to xiph.org, a non-profit focused on open video and audio codecs. The assignment included a defensive patent provision which prevents the patent from being used offensively. One of those applications has been published for examination as part of the standard USPTO patent application process. We believe that these applications may help in standards settings so we could achieve a better open standard for audio codecs. For better or worse, in the standards bodies participants use their IP to influence the standards and without some leverage, you’re left only with moral and technical arguments. We’ll see if our theory plays out in the future.

We haven’t filed other applications yet, but I don’t think the past should necessarily dictate the future. I can imagine many places where inventive developments are occurring that have strategic value to the industry, and where we want those protocols, techniques, and designs to stay open and royalty-free to the extent they are essential parts of a robust web platform. Ofcourse filing patent applications is one possible technique, but at those strategic intersections, I think we should entertain filing patent applications as one tool in our overall strategy.

In addition to patent filing strategies, there are other things we could do including:

Building out a robust defensive publication program. IBM wrote the book on this, maybe its time to make source code publications work the same way.

Developing an ongoing working prior art system available for defendants. We worked on a version of this a few years back, but the urgent beat out the important and no progress has been made since then.

Pooling patents with other like minded groups into safe pro-web entities with defensive protections. The pools need to be relevant to competitive threats for this to have value in my view.

Creating other disincentives to the offensive use of patents (similar to the MPL defensive patent provision) but relevant to larger parts of the web.

Sometime mid-year, I’d like to have a broader discussion to brainstorm further and prioritize efforts. Nonetheless, I’m pretty confident that given the changing landscape and markets, we’ll need to play in this domain more significantly one way or the other.